Top Florida home insurer could face big hit from Irma

A decade-long lucky streak of decent weather that helped rescue one of Florida’s biggest home insurers from collapse could come to a wet, violent end if predictions about Hurricane Irma prove true.

The state-run Citizens Property Insurance Corp. is strong enough to absorb the blow from the monster storm, industry experts say, but all the new claims could punch a hole in its finances, possibly leading to higher premiums in future years.

“Irma will threaten the part of the state where Citizens’ market share is the greatest, directly on the coastline,” said Robert Hartwig, an economist and insurance expert at the University of South Carolina. “Premiums will rise.”

Once a shaky, underfunded company, Citizens has transformed into a model of discipline, flush with money patiently built up over the years.

The company has 218,000 policies in Broward, Palm Beach and Miami-Dade counties, according to a March financial report, areas that could get hit hard by Irma. That is 15 percent of total policies in those counties, down from 41 percent just six years ago.

Still, Irma is likely to cost Citizens big money.

Citizens CEO Barry Gilway told his board on Wednesday that despite the insurer being dramatically less exposed, it could still wind up having 100,000 claims after the storm passes. Asked by The Associated Press on Wednesday for a dollar estimate of possible losses, a Citizens spokesman would not give a figure.

Hartwig cited estimates that if all homes insured by Citizens was destroyed, an extreme and unlikely case, the insurer would have to pay out $50 billion to allow owners to rebuild.

Jack Nicholson, director of the Florida Catastrophic Storm Risk Management Center at Florida State University, said the storm could wind up costing $100 billion in insured and uninsured damage for homes and other buildings in Florida. He said he has never seen a storm so powerful.

“We always talk about the big one, a matter of not if but when,” Nicholson said. “This has the potential to be the big one.”

Irma is already ranked as the most powerful Atlantic Ocean hurricane in recorded history. As it moved across the Caribbean toward Florida on Wednesday, the Category 5 storm ripped open rooftops, flooded streets and knocked out electricity. Meteorologists said Irma could hit the Miami area by early Sunday, then pummel the length of the state as it pushes into the Carolinas.

Florida’s last spate of bad storms came in quick succession in 2004 and 2005, ending with…